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Renewable energy experts have long hoped that solar and wind power would someday become the cheapest way to generate electricity, allowing the world to shift away from fossil fuel. That day has now arrived, much sooner than expected, says Faaiqa Hartley.

Knowable Magazine spoke with Hartley, who co-authored a review on the subject in the 2019 Annual Review of Resource Economics.

  • Prices for renewable electricity have been falling for many years. What’s surprising about what’s happening now?

Experts have been expecting a decline in prices, yes. But what has been such a game-changer is the rate at which these prices have fallen. Renewable energy is now comparable with the cost of building new coal and nuclear capacity.

  • How does that affect the wider economy?

Switching to renewables requires far less investment into your power sector than if you were to build new coal or nuclear power plants. That means a lower electricity price, and that has impacts on everything in the economy.

  • You’ve suggested that a surge in renewable sources of electricity will be especially beneficial for the world’s poorest people. Why is that?

In many developing countries, not everyone has access to electricity, because the infrastructure required to connect them to the system is not available. Renewable technologies can allow countries to skip the need of having extensive power grids, as energy production can be developed closer to centres of demand and, in the case of solar, can even be placed on people’s roofs.

  • Does the lower cost of renewables mean there is no longer a good reason to build fossil-fuel electric generating plants?

It depends on where in the world you are. Different countries have access to different types of resources. Here in South Africa, it makes sense for us to build renewables. We’ve got a very well-developed grid, and if we’re generating solar or wind power it’s just a matter of connecting those sources to the grid.

  • How long would it take a country like South Africa to make the transition? It gets only about 10 percent of its electricity from renewables today.

South Africa is actually at the perfect place to be switching to renewable energy. A lot of our coal power plants will be decommissioned by 2030 to 2040, so we need to start building new capacity.

  • Will that happen automatically, or will policy changes be required?

In South Africa, we do need policy intervention because the current policy is not to shift to renewable energy at the pace that’s needed. Numerous studies, including ours, have shown that it’s the least-cost path for the country. But the current policy still plans the building of new coal plants to 2050.

  • Will clean electricity bring other environmental benefits?

We do need to find ways of further reducing carbon emissions — but that doesn’t necessarily have to come from the power sector. For example, in the transport sector, you can now switch away from fossil fuels to electric vehicles, because you’re using a clean source of electricity. That will reduce emissions.

  • Are you optimistic that society will manage the transition to renewables?

I’m very optimistic about it. I think it’s something that will help significantly in a country like South Africa, where you’ve got the bulk of emissions being produced by the electricity sector. You’ve got an industry that is so electricity-intensive, and a lot of that industry is also producing for the export market. To have competitively priced green electricity is exciting.

Original article compiled by Bob Holmes

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